Bangladesh – Advance Payments for Import

The advance payment limit for imports into Bangladesh was raised to $10,000 from the previous limit of $5,000 this month. Small importers do not want to open Letters of Credit for importing goods in small quantities. So, they are allowed to make advance payments to their sellers abroad through respective banks and this can be up to $10,000 without the central bank’s approval.

The Bangladesh Bank raised the ceiling after receiving requests after requests for the approval of advance payments that exceeded the existing ceiling, according to a senior Bangladesh Bank. If your orders have a higher value, there may be an option to use an L/C and also receive an advance payment for a proportion of the order. They should ask the importer if they can open one of the following:

• Red Clause L/C - under which a deposit can be claimed as soon as the L/C is received from the confirming bank
• Green Clause L/C - same as above but the deposit is paid against presentation of a document that proves the existence of the goods prior to shipment.

In both of the above the balance amount is paid against presentation of documents, post shipment, in the usual way.

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